“5 Questions to Ask Before Signing A Business For Rent”
Do you know that you can find a business for rent?
Completely committing to a business can be a tough decision. Nowadays, however, there’s actually such a thing as a business for rent. This gives professionals such as yourself the opportunity to try a business out before committing to it.
A business for rent can be tricky, though. If you’re not careful, you may be stuck for years with a business that doesn’t suit you. You don’t want that!
Fortunately, there are ways to avoid that happening. In this blog, I’ll present to you five questions you should ask yourself before signing the agreement for a business for rent.
Reminders before Signing for a Business for Rent
When you’re considering a business for rent, you need to take care. This is because this decision will last for years. Termination may be an option but it will still require fees that may take a big bite out of your finances.
Having said that, signing into a business for rent isn’t a completely dangerous decision. In fact, it can even help you avoid worse business choices.
Business for rent arrangements exists to let you try a business on for size without sinking all of your capital into it. If you feel that the business isn’t right for you, you have an instant exit strategy. All you need to do is not renew the contract once it runs out.
With this in mind, what should you be asking yourself before signing into a business for rent?
Did I Understand the Lease?
A business for rent needs a business lease agreement in order to legalize the exchange. This is a complicated document, so it tends to put off a lot of people.
Don’t skip studying this document, though. It’s essential for you to understand it. Make sure to review the lease contract with guidance from your legal advisory team.
Important points that you need to go over are the duration, value, late fees, and taxes. You should also clarify provisions for termination issues, freezing the deal, and handling force majeure.
Fully understanding the lease agreement for a business for rent is important because it was likely written to protect the landlord’s interests. You should make sure that your interests are represented too.
Who Is Responsible for What?
Since this is a business for rent, you still share responsibilities with the landlord or the owner. With this in mind, you should clarify what obligations will fall in the tenant’s (your) responsibility.
For example, you should clarify who will be responsible for paying the insurance. Look at the insurance agreements for the building and furnishing.
You should also clarify how the CAM or Common Area Maintenance issues will be handled. If possible, you should set a cap on the CAM fees. Negotiate a maximum rate of increase over the years in order to prevent wild rent increases.
Maintenance fees should also be clarified. This will help you keep better track of your budget.
It would be wise to itemize all costs, such as trash, heating, and cleaning. You should also ask for the averages of these costs each month in order to avoid overspending.
Does the Space Match My Workforce?
Moving or simply entering into a new business and its location can be a huge shift for your workforce. See if all your workers will fit into this business for rent.
If you also plan to attract new employees or talent, think about that. It may not be easy if your work area can’t hold additional employees.
On that note, if you have a millennial workforce, you may want to have a spacious office. This is because this kind of workforce appreciates a good work environment as much as their salary.
Study the current and future growth of your business. After that, make sure that your estimations fit into the location and the business for rent itself.
This will prevent you from cutting down your own workforce just to fit the space you’ve rented.
Can I Sublet Extra Space?
Having more space than you currently need can open a chance to sublet.
Of course, your business for rent may grow in the future. If that happens, you’ll need the extra space. But until that happens, you can get some of your money back by subleasing the free space with another company.
Be sure to check if this is a possibility in the contract, however. You don’t want to violate the agreement by accident.
Did I Get the Best Deal?
As with any kind of negotiation, you shouldn’t assume that the first terms presented to you are your best options. As previously mentioned, the contract was made to cater to the needs and wants of the landlord. As the renter, you should get the most out of it as well.
Make a list of all the provisions that concern you and present them to your landlord. You can then negotiate with your landlord in order to get the best out of your deal.
Negotiating is highly advised because you will most likely be sticking around for years with this business for rent. Therefore, you should make it as comfortable for you as possible.
Final Thoughts on Signing for a Business for Rent
Keep these questions in mind as you go through the process of signing into a business for rent. If you do, you won’t have to worry about not getting the most out of your rent money.
To go over them again:
- Did you understand the lease?
- Who’s responsible for what?
- Does the space match your workforce or needs?
- Can you sublet?
- Did you get the best deal?
In short, you just need to consider your needs as a tenant and the possible future of the business. That way, you can negotiate a deal that will be worthwhile.
If you have any concerns or questions about what to ask yourself before signing with a business for rent, leave a comment down below!
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